UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington D.C. 20549
                                    ---------

                                    FORM 10-Q

                Quarterly Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934



For the quarter ended March 31, 1998            Commission File Number   0-8693
                      --------------                                   --------


                              TRANSNET CORPORATION
             (Exact name of registrant as specified in its charter)

               Delaware                              22-1892295
    (State or other jurisdiction of              (I.R.S. Employer
    incorporation or organization)              Identification No.)

            45 Columbia Road
            Somerville, New Jersey                    08876-3576
  (Address of principal executive offices)            (Zip code)

Registrant's telephone number, including area code:     (908) 253-0500


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the  Securities  and  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                            Yes   X      No


Indicate the number of share  outstanding  of each of the  issurer's  classes of
common stock, as of May 7, 1998: 5,216,804.


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TRANSNET CORPORATION
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INDEX TO FROM 10-Q
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Part I: Financial Information

Item 1: Consolidated Financial Statements

        Consolidated Balance Sheets as of March 31, 1998
        and June 30, 1997 [Unaudited]............................... 1......

        Consolidated Statements of Operations for the three and nine 
        months ended March 31, 1998 and 1997 [Unaudited]............ 2......

        Consolidated Statements of Cash Flows for nine months ended
        March 31, 1998 and 1997 [Unaudited]......................... 3......

        Notes to Consolidated Financial Statements [Unaudited]...... 4......5

Item 2: Management's Discussion and Analysis of Financial Condition
        and Results of Operations................................... 6......8


Part II: Other Information.......................................... 9......

Signature...........................................................10......




                          .   .   .   .   .   .   .   .


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TRANSNET CORPORATION
------------------------------------------------------------------------------


CONSOLIDATED BALANCE SHEETS
[UNAUDITED]
------------------------------------------------------------------------------



                                                        March 31,    June 30,
                                                         1 9 9 8      1 9 9 7

Assets:
Current Assets:
  Cash and Cash Equivalents                          $ 5,216,604   $ 3,336,917
  Accounts Receivable - Net                            9,168,815     8,986,318
  Inventories                                          3,047,467     3,274,462
  Other Current Assets                                   239,460       324,546
  Deferred Tax Asset                                      94,700       334,700
  Mortgage Receivable                                    440,000            --
                                                     -----------   -----------

  Total Current Assets                                18,207,046    16,256,943

Property and Equipment - Net                             719,514       916,254

Other Assets                                             893,200     1,051,101
                                                     -----------   -----------

  Total Assets                                       $19,819,760   $18,224,298
                                                     ===========   ===========

Liabilities and Stockholders' Equity:
Current Liabilities:
  Accounts Payable                                   $ 4,896,660   $   965,340
  Accrued Expenses                                       651,358       650,242
  Floor Plan Payable                                   1,017,873     4,384,040
  Deferred Income                                        316,075       162,576
  Other Current Liabilities                              268,615       264,481
                                                      ----------   -----------

  Total Current Liabilities                            7,150,581     6,426,679
                                                      ----------   -----------

Deferred Tax Liability                                    97,700        97,700
                                                      ----------   -----------

Stockholders' Equity:
  Capital Stock - Common $.01 Par Value, Authorized
   15,000,000 Shares; Issued 7,469,524 Shares             74,695        74,695

  Paid-in Capital                                     10,686,745    10,686,745

  Retained Earnings                                    8,027,682     7,156,122
                                                     -----------   -----------

  Totals                                              18,789,122    17,917,562
  Less:  Treasury Stock - At Cost                     (6,217,643)   (6,217,643)
                                                     -----------   -----------

  Total Stockholders' Equity                          12,571,479    11,699,919
                                                     -----------   -----------

  Total Liabilities and Stockholders' Equity         $19,819,760   $18,224,298
                                                     ===========   ===========


See Notes to Consolidated Financial Statements.

                                         1

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TRANSNET CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
[UNAUDITED]
------------------------------------------------------------------------------




                                Three months ended         Nine months ended
                                     March 31,                 March 31,
                                     ---------                 ---------
                               1 9 9 8      1 9 9 7      1 9 9 8       1 9 9 7
                               -------      -------      -------       -------

Revenue                      $17,564,437 $16,123,401   $57,360,566  $52,159,412

Cost of Revenue              15,678,214   14,354,376   51,268,395    46,466,680
                             ----------  -----------   ----------   -----------

  Gross Profit                1,886,223    1,769,025    6,092,171     5,692,732

Expenses:
  Selling, General and 
   Administrative Expenses    1,734,406    1,598,060    5,422,282     4,894,545
                             ----------  -----------   ----------   -----------

  Operating Income              151,817      170,965      669,889       798,187
                             ----------  -----------   ----------   -----------

Other Income [Expense]:
  Interest Income                35,892       34,458      105,890        80,230
  Interest Expense                   --       (4,752)          --       (40,735)
  Other Income                       --           --      466,489            --
  Other Expenses                (80,708)          --      (80,708)           --
                             ----------  -----------   ----------   -----------

  Other [Expense] Income - 
   Net                          (44,816)      29,706      491,671        39,495
                             ----------  -----------   ----------   -----------

  Income Before Provision
   for Income Taxes             107,001      200,671    1,161,560       837,682

Provision for Income Tax         25,000           --      290,000            --
                             ----------  -----------   ----------   -----------

  Net Income                 $   82,001  $   200,671   $  871,560   $   837,682
                             ==========  ===========   ==========   ===========

  Earnings Per Common Share  $     0.02  $      0.04   $     0.17   $      0.16
                             ==========  ===========   ==========   ===========


See Notes to Consolidated Financial Statements.

                                         2

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TRANSNET CORPORATION
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CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
------------------------------------------------------------------------------



                                                         Nine months ended
                                                             March 31,
                                                        1 9 9 8      1 9 9 7
                                                        -------      -------

Operating Activities:
  Net Income                                         $  871,560   $   837,682
                                                     ----------   -----------
  Adjustments to Reconcile Net Income to Net
   Cash Provided by Operating Activities:
   Depreciation and Amortization                        232,740       288,237
   Gain on Sale:  Land                                 (466,489)           --
   Deferred Taxes                                       240,000            --

  Changes in Assets and Liabilities:
   [Increase] Decrease in:
     Accounts Receivable                               (182,497)   (2,750,717)
     Inventory                                          226,995     1,969,192
     Other Current Assets                                85,086        90,949
     Other Assets                                        (1,610)      (41,676)

   Increase [Decrease] in:
     Accounts Payable and Accrued Expenses            3,932,436     1,146,341
     Deferred Income                                    153,499      (114,272)
     Other Current Liabilities                            4,134        (7,425)
                                                     ----------   -----------

   Total Adjustments                                  4,224,294       580,629
                                                     ----------   -----------

  Net Cash - Operating Activities                     5,095,854     1,418,311
                                                     ----------   -----------

Investing Activities:
  Capital Expenditures                                       --       (21,237)
                                                     ----------   -----------

Financing Activities:
  Floor Plan Payable                                 (3,366,167)     (671,005)
  Mortgage Receivable                                   150,000            --
                                                     ----------   -----------

  Net Cash - Financing Activities                    (3,216,167)     (671,005)
                                                     ----------   -----------

  Net Increase in Cash and Cash Equivalents           1,879,687       726,069

Cash and Cash Equivalents - Beginning of Periods      3,336,917     2,383,741
                                                     ----------   -----------

  Cash and Cash Equivalents - End of Periods         $5,216,604   $ 3,109,810
                                                     ==========   ===========


See Notes to Consolidated Financial Statements.

                                         3

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TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
------------------------------------------------------------------------------



[1] Summary of Significant Accounting Policies

[A] Consolidation - The consolidated  financial  statements include the accounts
of  the  Corporation  and  its   wholly-owned   subsidiary,   Century   American
Corporation.  Intercompany  transactions  and accounts  have been  eliminated in
consolidation.  During the prior year, the Corporation  liquidated four inactive
subsidiaries whose activities were previously merged with the Corporation.

[B]  Inventory  -  Inventory  consists  of  finished  goods.  The  Corporation's
inventory is valued at the lower of cost  [determined on the average cost basis]
or market.

[C] Cash and Cash Equivalents - For the purposes of the statement of cash flows,
the  Corporation  considers  highly liquid debt  instruments,  purchased  with a
maturity of three months or less, to be cash equivalents.

[D]  Earnings  Per Share -  Earnings  per  common  share are based on  5,216,804
weighted shares outstanding for the period ended March 31, 1998 and 1997.

[2] Income Taxes

The  Corporation  has a deferred tax asset of $94,700 based on temporary  timing
differences including inventory capitalization, allowance for doubtful accounts,
vacation pay accruals and net operating loss carryforwards.

The Company  anticipates  fully utilizing its net operating loss carryforward of
approximately $948,000 during the current year.

[3] Reclassification

Certain items from prior year's financial  statements have been  reclassified to
conform to the current year's presentation.

In the opinion of management,  the accompanying unaudited consolidated financial
statements   contain  all  adjustments   consisting  only  of  normal  recurring
adjustments  necessary to present fairly the financial position,  the results of
operations and cash flows for the periods presented.

These  statements  should be read in conjunction with the summary of significant
accounting  policies and notes contained in the  Corporation's  annual report on
Form 10-K for the year ended June 30, 1997.

[4] Asset Purchase Agreement

On October  31,  1997,  the  Corporation  executed an Asset  Purchase  Agreement
providing  for the sale for a  maximum  $20.5  million  cash  purchase  price of
substantially all of its operating assets, subject to certain liabilities,  to a
wholly-owned  subsidiary of GE Capital Information  Technology  Solutions,  Inc.
["GEITS"].  GEITS is an  affiliate  of GE  Capital  Services  which in turn is a
wholly-owned  subsidiary of General  Electric  Company.  On March 26, 1998,  the
Corporation announced that the Asset Purchase Agreement had terminated because a
condition of the Agreement was not met.





                                        4

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
[UNAUDITED]
------------------------------------------------------------------------------



[5] Sale of Land

On  November  11,  1997,   the   Corporation   executed  an  agreement  to  sell
approximately 6.32 acres of unimproved real property in Mountainside, New Jersey
[the "real  property"]  to W Realty LLC ["W Realty] for the  appraised  value of
$1,000,000.  W Realty is a partnership  consisting of John J. Wilk,  Chairman of
the Board,  and Raymond J. Rekuc,  a Director of the  Corporation.  The purchase
price is payable  through a credit  extended  by W Realty as  sub-lessor  to the
Corporation  as sub-lessee  for the $410,000 of rent payable by the  Corporation
over  the  last  two  years  of its  sublease  for  its  principal  facility  in
Somerville,  New Jersey  and a $590,000  promissory  note  executed  by W Realty
payable in  installments  of $150,000 in February  1998 and $440,000 in November
1998.  The note bears  interest  at the rate of 8% per annum and is secured by a
mortgage on the Real Property.  The Real Property was specifically excluded from
the assets which the Corporation  agreed,  subject to stockholder  approval,  to
sell to GEITS [See Note 4].






                .   .   .   .   .   .   .   .   .   .   .   .  .

                                        5

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Results of Operations

Revenues for the three months ended March 31, 1998 were  $17,564,437 as compared
with  $16,123,401  for the quarter  ended March 31, 1997.  For the quarter ended
March 31, 1998 the  Corporation  reported net income of $82,001 as compared with
net income of $200,671 for the similar period in 1997. For the nine months ended
March 31, 1998, revenues were $57,360,566,  as compared to $52,159,412  reported
for the similar  period in 1997,  with net  earnings of $871,560  for the period
ended March 31, 1998, compared with net earnings of $837,682 for the same period
in 1997.  The increase in revenues is primarily  due to increases in the sale of
the  Corporation's  technical  services  (such as technical  support,  technical
repair  and  maintenance  services,  system  integration,   network  design  and
installation,  and training),  and to a lesser extent to an increased  volume of
hardware sales.  Operating income for the quarter ended March 31, 1998 increased
as a result of cost controls  imposed by  management.  The decrease in operating
income for the nine-month  period is the result of continued  price decreases of
computer  hardware  and the  increase  in salary  related  expenses  incurred in
connection  with the  expansion of the  Corporation's  technical  service  staff
during the first half of the fiscal year.

Net income for the quarter  ended March 31, 1998 is  attributable  to  increased
service revenues and  management's  concentration on sales of network and system
integration products which yield higher profit margins. Earnings for the quarter
were negatively  impacted by  non-recurring  expenses of  approximately  $81,000
associated  with the proposed sale of assets by the  Corporation to a subsidiary
of General Electric Capital Information  Technology Solutions,  Inc. ("GECITS").
As discussed below, the Asset Purchase Agreement was terminated when a condition
to the sale of assets was not met.

Service  related  revenues,  though not a material  source of the  Corporation's
revenues,  are  significant  in their  contributions  to earnings  because these
operations  yield a higher profit margin than equipment  sales.  The Corporation
continued  to  increase  its  technical  staff in response to the demand for its
services,   encountering  an  industry-wide   shortage  of  qualified  technical
personnel, resulting in a high level of competition to hire and retain technical
staffs.  Management  anticipates these trends to continue. For the quarter ended
March 31, 1998, the increase in revenues from the provision of service, support,
outsourcing  and network  integration  is largely the result of the  Corporation
renewing and/or entering into service contracts with a number of large corporate
customers. The majority of these contracts are short-term, usually twelve months
or less, and contain  provisions  which permit early  termination.  Although the
contracts  generally  contain  renewal  terms,  there is no assurance  that such
renewals will occur.

The  computer  industry  continually  faces a trend  of  decreasing  prices  for
computers  and  related  equipment.  Management  believes  that this  trend will
continue.  Industrywide,  the  result of price  erosion  has been  lower  profit
margins on sales, which require businesses to sell a greater volume of equipment
to maintain past earning levels.  Another result of the price decreases has been
intensified  competition  within the industry,  including the  consolidation  of
businesses  through merger or acquisition and the entrance of manufacturers into
technical services business.  Management  believes that the adoption of policies
by many larger corporate  customers to limit the number of vendors  permitted to
provide goods and services for specified  periods of time has further  increased
price  competition.  To meet these  competitive  challenges  and to maximize the
Corporation's profit margin,  management has modified its marketing strategy and
has  enforced  expense  controls.  Management's  current  marketing  strategy is
designed  to  increase  sales of lower  revenue/higher  profit  margin  products
related  to  service  and  support  operations.   Management's  efforts  include
targeting  commercial,   educational  and  governmental  customers  who  provide
marketplaces  for a  wide  range  of  products  and  services  at  one  time,  a
cost-effective  approach  to sales.  Management  believes it  maximizes  profits
through  concentration  on sales of value-added  applications;  promotion of the
Corporation's   service  and  support   operations;   and  strict  adherence  to
cost-cutting  controls.  In  light  of  the  above,  management  emphasizes  and
continues the aggressive  pursuit of an increased  volume of equipment sales, in
particular  network  and system  integration  products,  technical  service  and
support programs, and promotion of its training services.

                                        6

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TRANSNET CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Results of Operations [Continued]

Interest income for the quarter and nine-month  period  increased as compared to
the  corresponding  periods in the prior year  because  of the  increase  in the
amount of funds invested and higher yields. Interest expense for the quarter and
nine-month period decreased as compared to the  corresponding  periods in fiscal
1997 as a result of  management's  efforts to shorten the  collection  cycles of
account receivables, with a resulting reduction in related financing costs.

Although actual expenses increased in fiscal 1998 due to the expenses related to
the significant increase in the Corporation's technical staff (discussed above),
selling,  general and administrative  expenses remained  relatively  constant at
approximately  10% of  revenues  for the quarter  and  approximately  9% for the
nine-months ended March 31, 1998 and 1997, due to management's  strict adherence
to cost-control measures.

Liquidity and Capital Resources

There are no material commitments of the Corporation's capital resources.

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under  which  such  inventory  secures  the  amount   outstanding.
Inventory  increased to normal in the quarter and nine-month  period ended March
31, 1998 as compared to the lower than  normal  inventory  in the  corresponding
periods  in 1997,  which was lower in  response  to  increased  inventory  turns
related to the higher volume of sales.  Management shall continue its efforts to
increase  turnover  and to  provide  the  Corporation  with  protection  against
inventory  obsolescence  resulting from the rapid technological  advances of the
computer industry, as well as to minimize floor plan financing.

Accounts receivable decreased for the quarter and nine-month periods ended March
31,  1998  compared  with the same  periods in fiscal  1997 due to  management's
efforts to shorten collection cycles. Accounts payable increased for the quarter
and  nine-month  period ended March 31, 1998  compared  with the same periods in
1997 as a result of the increased volume of sales.  Cash levels increased in the
nine-month period ended March 31, 1998 as compared to the  corresponding  period
in 1997 due to variations in scheduled payment requirements.

For the fiscal  quarter and nine months ended March 31, 1998,  as in the periods
ended March 31, 1997 the internal  resources of the Corporation  were sufficient
to enable the Corporation to meet its obligations.

On March 26, 1998, the Corporation  announced that the Asset Purchase  Agreement
with a subsidiary of GECITS had terminated  because a condition of the Agreement
was not met when it was informed that TransNet's  major  customer,  Merck & Co.,
intended to enter into  arrangements with a vendor other than TransNet or GECITS
or its subsidiaries  with respect to a substantial  portion of the business that
the  major  customer  previously  conducted  with  TransNet.  This  will  have a
significant  impact  upon  the  Corporation's  revenues,  and  the  loss of this
customer would have a material adverse impact upon the Corporation if management
does not replace the purchases of equipment and technical  services with similar
purchases from new accounts.  Although the Corporation is aggressively  pursuing
new accounts and expansion of existing business,  no assurance can be given that
the Corporation will be able to replace the business from its major customer.



                                        7

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TRANSNET CORPORATION AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
------------------------------------------------------------------------------



Liquidity and Capital Resources [Continued]

Management  has been  appraised of an  unasserted  possible  claim or assessment
involving  the  Corporation's  Pension  Plan.  The Plan was adopted in 1981 as a
defined benefit plan. In 1989,  various actions were taken by the Corporation to
terminate the Plan, to convert it to a defined  contribution  plan and to freeze
benefit  accruals.  No filing  for plan  termination  was made with the  Pension
Benefit  Guaranty  Corporation (the "PBGC").  Additionally,  a final amended and
restated plan document incorporating the foregoing amendments and other required
amendments  including those required by the Tax Reform Act of 1986 do not appear
to have been properly adopted. In addition,  since 1989, it appears that certain
operational  violations occurred in the administration of the Plan including the
failure to obtain spousal consent in certain instances where it was required.

The Corporation  currently  intends to (i) take corrective  action under the IRS
Walk-in  Closing  Agreement   Program  ("CAP"),   (ii)  apply  for  a  favorable
determination  letter with respect to the Plan from the IRS, and (iii) terminate
the Plan.  The CAP program  provides a correction  mechanism for "non  amenders"
such as the  Corporation.  Under  CAP,  the  Corporation  will be  subject  to a
monetary sanction (which could range from $1,000 to approximately  $40,000).  In
addition,   the  Corporation   will  be  required  to  correct,   retroactively,
operational violations,  and to pay any resulting excise taxes and PBGC premiums
and penalties that may be due.  Special counsel has advised the Corporation that
although  it  believes  that  the  Corporation  will  incur  some  liability  in
connection  with  the  correction  of  such  operational  violations,  it is not
possible to estimate the  potential  amount of or the range of liability at this
time. Such counsel has also advised that depending on the corrections  required,
such liability could range from an insignificant to a material amount,  but that
due to the uncertainties  involved, any estimate in dollar terms of the range of
any such liability at this time would be speculative and potentially misleading.

The matters  discussed in this report that are  forward-looking  statements  are
based on current  management  expectations that involve risk and  uncertainties,
which include:  the impact of economic conditions  generally and in the industry
for  microcomputer  products and  services;  continued  competitive  and pricing
pressures in the industry;  product supply shortages;  open-sourcing of products
of vendors;  rapid product improvement and technological  change,  short product
life cycles and resulting  obsolescence  risks; and other risks set forth in the
Corporation's other filings with the Securities and Exchange Commission.

                                        8

<PAGE>



TRANSNET CORPORATION AND SUBSIDIARY
PART II - OTHER INFORMATION
------------------------------------------------------------------------------




Item 6:Exhibits and Reports on Form 8-K

       A. Exhibits - None required to be filed for Part II of this report.

       B. Reports on Form 8-K - None filed  during the  quarter for which this
          report is submitted.



                                        9

<PAGE>


SIGNATURES
------------------------------------------------------------------------------






Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                    TransNet Corporation


Date:   May 14, 1998                By: /s/ Steven J. Wilk
                                       -------------------
                                       Steven J. Wilk,
                                       Chief Executive Officer



Date:  May 14, 1998                 By: /s/ John J. Wilk
                                       John J. Wilk,
                                       Chief Financial and Accounting Officer



                                       10

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